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USA GAMBLER ALMOST LOSES 330 BITCOIN AT CLOUDBET

Online gambling became one of the first use cases for bitcoin because countries like the United States made it very difficult to deposit and withdraw funds from online poker rooms and sportsbooks.  The Unlawful Internet Gambling Enforcement Act of 2006 forced credit card companies and banks in the United States to prevent and prohibit transactions to internet gambling operators. Luckily for gamblers, a few years later a decentralized internet currency called bitcoin appeared that governments were unable to censor.  Online gambling companies (e.g Baccarat Online) quickly saw the benefits of this new crypto currency and added it to their cashiers. In 2017, a major offshore bookmaker revealed that 90% of their customers used bitcoin for deposits and withdrawals and they predicted that this number would rise to 100% in the coming years.

The earliest bitcoin bookmakers and poker rooms accepted gamblers from anywhere in the world.  Many sites allowed you to create a betting account anonymously by just providing a username and password.  However, as the industry grew, many of the biggest sites began to feel the heat from governments around the world and started to restrict players from certain jurisdictions.  For example, Nitrogen Sports is no longer available in the United Kingdom and Americas Cardroom have exited Australia after online poker was outlawed there.

Since cryptocurrency gamblers are allowed to create accounts anonymously at many bitcoin poker rooms and sportsbooks, gambling operators blocked users based on their IP location.  However, some people continue to bypass these restrictions by using a VPN (Virtual Private Network) to hide their true location. Once recent example involves a bitcoin sports bettor from the United States who was holding 330 BTC in his CloudBet betting account.  CloudBet currently restricts players from the USA, UK, Hong Kong and Singapore but this USA-based player decided to continue using the sports betting site with the help of a VPN.  

Unfortunately for him, when he tried to withdraw his 330 bitcoin, the CloudBet sportsbook requested KYC / AML documentation.  While most cryptocurrency gambling sites do not require players to provide ID’s for small payouts, they will probably ask for some form of identification if you try to withdraw over a million dollars like this gentleman did.  Faced with the prospect of losing 330 BTC, the U.S. CloudBet customer panicked and made his second mistake by lying to CloudBet customer support. Had the player admitted that he broke their terms of service by connecting to their site from the USA, CloudBet would simply have allowed him to withdraw his funds and then permanently closed this account.  Instead he got a friend in the Philippines to provide credentials and claim the account was his. CloudBet found this suspicious and immediately froze his account.

Faced with losing over a million dollars, the player published threads of every major bitcoin message board and subreddit saying that CloudBet had stolen his money.  Thankfully cool heads prevailed and after completing their investigation, CloudBet eventually sent the player his 330 BTC.  In return, the US-based gambler admitted he hadn’t been completely truthful and that the controversy was of his own making.

While some cryptocurrency gambling sites have decided to block players from certain countries, there are still plenty of crypto sportsbooks, casinos and poker rooms who don’t care where you live.  Rather than taking a risk and using a VPN, it’s better to do little bit of research and find a gambling site that does not have any country restrictions.

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